Loveland water projects move along

One more piece of a $40 million puzzle was completed last week when the City Council authorized staff to seek $10 million for a water bond.

By Jessica Maher Reporter-Herald Staff Writer

Posted:
07/11/2013 05:44:46 PM MDT

A crew from BT Construction wraps up a water line replacement project Wednesday on south Lincoln Avenue in Loveland. From left are Ernesto Ibarra, Dave Turnbull and Joe Barger. The project is one of many involved in major system upgrades over the next decade.
(
Jenny Sparks
)

Piece by piece.

That's how Loveland's aging water system will be upgraded and that's also how millions of dollars for the projects have been funded.

One more piece was completed last week when the City Council authorized staff to seek $10 million for a water bond. Combined with water rate increases approved earlier this year and an ordinance for an internal $ 6 million loan that was approved last week on first reading, the city's Water and Power Department is closer than ever to being able to move full-speed ahead on more than $40 million in system upgrades.

For Water and Power Department staff who have worked prioritizing projects and how to fund them for more than a year, last week's council meeting was reason to celebrate.

Corrosion caused a hole in this iron water pipe that crews replaced Wednesday with PVC pipe during a water line replacement project on south Lincoln Avenue in Loveland. In a 60-foot section of this area, crews found a repair clamp every 5 feet.
(
Jenny Sparks
)

Several years ago now, staff began to realize that a serious, expensive problem was on the horizon for the city. While efforts had previously focused mainly on installation of new water lines, when the housing boom leveled off, so did that push.

Increasingly, staff found themselves working to repair existing, aging lines, some of which are 50 to 80 years old.

"Our goal is to prepare for the future and maintain what we have," Water Utilities Manager Chris Matkins said. "We started talking to City Council about a growing need."

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At the same time, the city's Water Treatment Plant was also due for an upgrade that's traditionally done about once a decade. The plant currently produces about 27 million gallons a day, but it is taxed during hot and dry spells to the point where the city has had to buy water from outside municipalities.

The ordinance approved by the City Council last week authorizes borrowing $10 million to be put toward an expansion that will increase the plant's capacity to 38 million gallons a day. The expansion is currently in the design stage, with construction eyed for next spring and estimated to be online in 2016.

"This will prepare us for additional growth and increase the reliability of the treatment plant," Matkins said.

When the terms and provisions of the water enterprise revenue bond were approved unanimously by the council last week, the interest rate was left blank, not to exceed 3.5 percent, due to an unexpected spike in rates. But this week, after monitoring the rates, the city moved quickly to lock in an interest rate of 3.19 percent on the 20-year loan, city fiscal advisor Alan Krcmarik said Thursday.

The $10 million in borrowing will be used for costs associated with the water plant expansion. The $6 million interfund loan from the power enterprise to the water enterprise would be put toward the water line replacement work, if the ordinance is approved by the council next week on second reading.

The first reading was approved last week with a vote of 7 to 1, with Councilor Ralph Trenary dissenting.

The water rate increases, which will double over 10 years what home and business owners pay now, was a contentious issue when discussed earlier this year before being finally approved by a split council. Now, with all three components nearly in place -- rate increases, water bond, interfund loan -- prioritized projects can now begin, starting with the oldest lines, the least reliable and the ones of the most important routes.

The goal is to invest about $2 million in water line replacement work each year. The interfund loan, if approved, will pay for that for the next three years until enough revenue from water rates is achieved to start the program back up, Matkins said. The increased rates will also help pay off the debt service.

In the first year of the program, priority projects on First Street, Custer Avenue, South Lincoln Avenue and 29th Street were first to be rolled out.

"The goal is to do a little bit every year and our goal is always to provide the most bang for the buck," Matkins said.

And it does end up being a very little bit, considering $2 million pays for approximately one mile of average size water line and the city has about 435 miles.

Still, Matkins said the work is a "good first step," that will certainly have an impact in neighborhoods with old, deteriorating water lines that frequently need repair.